S.E.C. Issues Mea Culpa on Madoff

by Dave Keating | December 17, 2008 at 01:52 am

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One of the most amazing things about the giant Ponzi scheme run by Bernard Madoff is how many times the SEC was warned about it and yet did nothing. Today the body has released a statement accepting blame for missing the repeated warnings. The losses from the scheme could be as high as $50 billion, and many international banks and charities have lost huge sums of money after being taken in.

The commission said it received credible allegations about the scheme at least nine years ago and will immediately open an internal investigation to examine why it had failed to pursue them aggressively.

The S.E.C. issued the statement hours after Bernard L. Madoff, the 70-year-old Wall Street executive accused of operating the scheme, discussed the fraud with federal authorities at a meeting in New York on Tuesday, according to people briefed on the meeting.

“Our initial findings have been deeply troubling,” Christopher Cox, the S.E.C. chairman, said in his statement. The commission received “credible and specific allegations regarding Mr. Madoff’s financial wrongdoing,” but did not respond aggressively, he said.